This year is looking like a difficult one for individuals and families across the world. With millions out of work – and still more on a reduced salary, or on reduced hours – it can become difficult to make ends meet. That’s why, in this article, we’re going to take a look at the ways in which you can save you, and your family, some cash – ensuring that you’re not eating into your savings during this difficult financial period. With the right preparation, you’ll be able to reduce many of your monthly costs – as you’ll see below.
Your Subscriptions
When you check through your bank statement each month, you may come to find a few recurring payments that you feel are above and beyond what you can cover at the moment. These might include exorbitant phone bills, fees for membership organizations, or subscriptions to software or services. Look up how to cancel Adobe subscriptions, and how to shut-down direct debits you’re paying in order to reduce your total expenditure every month.
Food and Drink
Next up is the cash you spend on food and drink for your family. While it’s always nice to splash out on a takeaway meal, or expensive food from restaurants and cafes, it can sometimes be a little irresponsible to do so when you’re not earning a great deal of cash. Cutting down on what you spend on food and drink – and this includes alcohol, which can be expensive – will help you save for the future in a responsible fashion.
Bills
Many families across the US pay their bills in relation to how much electricity and heating, or air conditioning, they use. In these summer months, there’s less reason than usual to use your energy up in your home: it’s warm outside without being stifling, and it’s light for most of the waking day. If you can cut down on your energy usage in your home, your bills will reduce dramatically as a result.
Vehicle
How much are you driving at the moment? Are you able to cut down the amount that you drive, replacing some journeys with public transport, walking, or cycling? The amount of cash you spend on gas and vehicle repairs each year can really add up, leaving you with costs of over $100 each month. If you can, attempt to leave behind some of your driving so that you’re saving this cash to put towards more valuable investments.
Luxuries
Finally, if you’re beginning to worry about your cash flow in the future, it’s best to begin thinking shrewdly about what you spend your cash on, and where you decide to spend your expendable income. Everyone is different, with unique luxuries and a unique spending pattern. It’s up to you to see what’s essential and what’s a luxury, and to cut out the latter in your monthly spending. You can return to that luxury spending when you’ve found financial stability once again.
Use the tips outlined in this short article to cut out a good deal of your monthly spending, helping you to achieve financial stability for yourself or for your family.
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As COVID-19 began to move throughout the US, organizations reacted quickly to enable employees to “work from home.” For many leaders, this was a shock and they struggled to effectively adapt their organization to a blended world. The myth of work/life balance was prevalent in many companies as they failed to recognize the trends pointing to increased integration of work and life. The concept of work/life balance, or the separation between work and life, was dealt a huge blow with the outbreak of COVID-19. The novel coronavirus forced leaders of hierarchical, on-site, 9-5 businesses to acknowledge what should have been blatantly obvious: work and home life can no longer be looked at as being balanced but should be viewed as blended.
COVID-19 simply accelerated the trend that has been taking place for years. In my TEDx Talk, Blendification® of Work and Life, I highlight that social, technological, and economic impacts are forcing work and life together. The work/life balance myth has run its course. Here are some observations from the focus on work/life balance:
Work/life balance has become a cover for “look at how hard I am working.” Over the years, I have never heard anyone say, “I need more balance, I am spending way too much time with my family.” More accurately, it is the reverse. People are constantly saying they “need more balance,” which is code for “I am working too hard” or “look at how hard I am working.” They are typically bringing attention to their work ethic as if it is a badge of honor. As a result, work/life balance has turned into a personal proclamation about my strong work ethic at the expense of my personal and family life.
Work/life Balance creates an adversarial relationship between the two. When pursuing work/life balance, an adversarial or competitive relationship becomes prevalent. When this happens, people begin to keep score. It is not uncommon to hear people add up their work hours and become frustrated when they exceed what they consider “balanced.” The pursuit of balance is a futile quest. If you are pursuing your human potential, you cannot separate work and life. You will never achieve equilibrium between the two.
Work and home life do not happen in averages. Life happens in extremes, but we talk about it in averages. As someone once told me: “If I have one foot in a boiling hot bucket of water and the other in ice cold water, the average is fine, but I am not feeling fine!” That describes work and home life. There are constant demands that create the need to be in one area or the other. With fluctuating and conflicting demands, pursuing balance is unrealistic.
While work/life balance has proven to be a myth, blending work and life is more realistic and aligns with social, technological, and economic trends. There are two aspects to consider when blending work and life: the physical and the psychological. Here are some insights into each:
Physical Blending Work and Life
As the novel coronavirus swept the world, companies scrambled to create work-from-home capabilities. As mentioned, this accelerated the trends that were already taking place. Organizations quickly leveraged technology to enable a transition from working in an office to working from home. In some cases, this was done hastily because there were tangible deadlines and corresponding health consequences. As work becomes more integrated physically with homelife, here are ideas that will be helpful going forward:
Provide guidance to employees (directional and financial) in setting up dedicated workspace.
Make recommendations on boundaries to reduce “interference.”
Update policies and procedures with detailed expectations related to working from home.
With increased risk of technology and security breaches, make sure you have updated your protection and keep enhancing it since hackers see an opportunity in penetrating our data.
Maintain standards in work attire for those participating in online meetings.
Create dedicated technology-driven social events.
Psychologically Blending Work and Life
While most of the focus has been on the physical aspects of blending work and life, the true benefits of a blended life are psychological. The millennial generation has opened our eyes to the need to pursue our human potential by positively impacting the world. Given that we spend over 50% of our waking time at work or in work-related activities, we cannot possibly realize our human potential without incorporating work. As a result, the workplace becomes one of the primary areas where people pursue their potential and maximize their impact on society.
What happens at work, happens at home, and this inherent connection is key to creating a better workplace, better homelife, better customers, and better communities. When workplace organizations recognize the importance of growing and developing their employees—not just their job-related skills, but their personal and leadership skills—they will see happier and more fulfilled employees taking pride in their entire life. Here are some points related to developing the psychological aspects of blending work and life:
Develop, define, and disseminate your desired culture to make it so compelling and strong that it is alive when employees are working from home.
Align your culture with a motivating cause.
Create a strategic platform that sets clear strategic focus, outcomes, and actions that are connected to the organization’s culture and cause.
Cascade the strategic platform throughout the company through internal peer accountability groups (we call them Roots Groups in The Blendification® System).
Institute ongoing training and development around activating your employees’ human potential, leading to greater lifelong fulfillment.
Build an ongoing communication and operating system that blends your culture, strategy, and execution, linking employees’ daily work to meaningful outcomes.
The illusion of work/life balance has been revealed with the response to the COVID-19 outbreak. It is time to embrace the trends that have been taking place for years and leverage work to enhance employees’ lives, customers’ lives, and the benefits to their communities. Since COVID-19 accelerated working from home, business leaders now have the opportunity to increase their company’s impact by blending work life and homelife.
About the Author
Dan Bruder is the CEO of Fusion Dynamics Group, an international strategy and leadership consulting firm based in Colorado. He has an accomplished background in executive leadership and is a faculty member of Colorado State University’s Executive MBA program and the University of Colorado, Boulder’s Graduate Leeds School of Business. Drawing on his 30-plus years of leadership experience, he created The Blendification® System: Activating Potential by Connecting Culture, Strategy and Execution. The Blendification® System book is available on Amazon as well as through a series of workshops and keynotes. Learn more about The Blendification® System, at www.BlendificationSystem.com
https://www.strategydriven.com/wp-content/uploads/corona-4983590_1280.jpg8531280Sharon Kastorianohttps://www.strategydriven.com/wp-content/uploads/SDELogo5-300x70-300x70.pngSharon Kastoriano2020-06-04 08:00:142020-06-04 02:47:42Forget Balance: How COVID-19 Drives Home the Importance of Work-Life Blending
Hiring staff is important and relevant to any business. How much of it depends on what you need for your business. Too many staff and you run the risk of being financially vulnerable, too few, and you restrict the ability to grow and thrive. Here are some tips for hiring in a business.
Know What You Want
It’s good to know what you want when it comes to hiring. If you haven’t got a job description outlined, then it can be a case of drawing in the wrong people, and then you end up starting all over again. It’s important to have your wants and needs in the job description and to have the role cemented before it gets distributed to relevant job boards and agencies. If you can be more precise and on the mark in the initial stages of hiring, then you reduce the risk of wasting everyone’s time and finding the right person. The last thing you want is to end up with someone who was never the right fit because you didn’t have all of the skills or duties of the employee outlined properly.
Assess The Skills & Experience Needed
Regardless of the company, the size or what industry it’s in, the skills and experience are an important part of the hiring process. You want to make sure that the person you’ve picked is capable of doing what you need them to do within the business. Whether you’re looking or plumbers who’ve taken plumbing programs for a handyman services platform or getting a new building manager, skills and experience are relevant. Just like the job description, it’s important to access what’s needed and to make sure that when you’re going through resumes, you’re getting rid of any that don’t match the criteria you’re after.
Look Out For Personality
Personality is just as important as the person fitting the job description. They need to be able to fit in with the company dynamic and they also need to feel like they are right for the company. If you’ve got someone that’s lacking in the company’s type of personality or doesn’t fit right, then it can cause problems with the rest of that staff and how overall atmosphere. So when it comes to hiring, be sure to get to know the person you’re interviewing, who they are, and what they enjoy outside of the workplace.
Introduce Existing Staff
Your current staff plays an important role of the hiring process because like mentioned above, the person you’re recruiting has to suit the team. With that being said, it’s worth introducing your team or an existing member of staff to the final few you’re interviewing. This can help to understand whether they’ll fit in properly and what the existing staff thinks of the individuals on a personal level. You don’t need to agree with their thoughts, but they are there to help come to the right decision overall.
Hiring in a business can be a challenge, and so it’s important to take it seriously and be detailed in your search.
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The Coronavirus aid package, known formally as the CARES act, was passed by the American government in an effort to help alleviate the economic impacts of the COVID-19 pandemic on small business owners and families. With all of the economic uncertainty caused by the pandemic, families and individuals should seriously consider taking advantage of all available resources to avoid long-term personal and professional consequences. Get started by reading on to find out about three of the most important things about the coronavirus aid package.
Small Businesses Can Get Low-Interest Loans
The CARES act makes provisions for the Small Business Administration (SBA) to provide cash-flow assistance to businesses with fewer than 500 employees in the form of low-interest loans. These loans are provided by banks, but they’re guaranteed by the SBA. To get a loan, businesses must meet eligibility criteria, find an approved SBA 7(a) lender, and apply for the program before funding runs out. The best way to get started is to find information online at bswllc.com about CARES act loan consulting for small business owners.
The loans provided through the CARES act Paycheck Protection Program are specifically designed to help small businesses weather the storm of COVID-19. They can be used to cover things like payroll costs, paid sick leave, health insurance premiums, mortgage payments, and more. Eligible borrowers include not just small businesses, but also 501(c)(3) tax-exempt non-profits, registered veterans organizations, sole proprietors, tribal businesses, independent contractors, and the self-employed.
Coronavirus Relief Loans Are Partially Forgivable
When the loans are used to pay employee wages after businesses are partially or fully suspended or gross income declines by more than 50% in comparison to last year, the loans are partially forgivable. Eligible businesses with less than 100 full-time employees can get partial loan forgiveness regardless of whether they have been subject to shut-down orders.
If borrowers follow all the regulations laid out in the CARES act for how the loans can be used, they will be eligible for forgiveness of the money spent not just on payroll costs, but also rent, utilities, interest payments, and mortgages taken out before February 15, 2020. Since the SBA is guaranteeing the loans through private lenders, it is up to the discretion of the lender to determine forgiveness. The timeframe for forgiveness by lenders is currently 60 days from the borrower’s request.
Borrowers must provide documentation of how the money was spent to prove that the loan was used for approved purposes. This documentation must verify how many full-time equivalent employees are on the company’s payroll, how much they were paid, and how much the business spent on mortgage or lease obligations, utility payments, or other debt obligations. Lenders can request additional documentation if they deem it necessary to verify that the borrower’s expenses qualify for loan forgiveness.
Businesses that lay off employees or reduce their wages during the covered period of eight weeks from the time of taking out the loan will have the amount of forgiveness reduced. Employers who reduced payroll or employee headcounts between February 15 and April 26 can reinstate their former employee payrolls by June 30 to restore their ability to request loan forgiveness.
The CARES act also makes provisions for a refundable payroll tax credit. Employers who keep their workers on the payroll even if they can’t work full-time, or at all, can expect the program to cover 50% of their wages during the COVID-19 crisis. The credit will cover wages paid from March 13 to December 31 of this year up to $10,000 per eligible employee.
Student Loan Borrowers Get a Reprieve
Business owners aren’t the only ones who have benefited from the CARES act. In addition to the paycheck protection program, it also stipulates that student loan borrowers will not have to make payments on the federal loans until September 30. During this relief period, student loan payments will be fully deferred, and no interest will be accrued on the accounts.
There’s even more good news for borrowers whose loans are in rehabilitation. For every month that the loans are suspended due to the COVID-19 pandemic, the suspended payment will count as if the borrower had made the payment. This avoids disruptions to former students’ loan forgiveness obligations and reduces the burden on borrowers who are rehabilitating their federal student loans.
Borrowers with eligible student loans don’t have to do anything to take advantage of this program. They can simply stop paying their loans without incurring any fees or additional interest. Those who choose to continue paying their loans will also benefit since 100% of the payments will go to paying down their principal balances during this time.
Borrowers who have defaulted on their student loans will not have their wages garnished during the relief period. If they have experienced wage garnishments since March 13, borrowers can contact their employers to request that any funds sent to the Department of Education during this time be returned. Borrowers whose 2019 tax refunds or Social Security payments were withheld to pay off defaulted student loans can also have their refunds returned provided the process for withholding it was completed after March 13.
The CARES act also makes a provision for employers who pay down student loans as part of their employee benefits packages. These employers can now contribute up to $5,250 through the rest of 2020 tax-free, which benefits both employers and employees.
The Bottom Line
It can be difficult for business owners and consumers to sort out all the provisions of the CARES act by themselves. The best thing for those with questions about eligibility or the application process to do is to contact an accountant who can help them better understand what assistance is available during these trying times. The pandemic has changed everything about life in America and across the world, but it shouldn’t mean that business owners and families wind up suffering needlessly. Don’t be afraid to take advantage of the CARES act provisions for protecting America’s workers, but make sure to consult an expert before taking out an SBA-guaranteed loan to ensure eligibility and clarify requirements.
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All businesses cost money to run and involve necessary expenses such as employee salaries, office overheads, and supply costs. While some expenses are unavoidable, there are various ways to cut your business costs and save more each month. Becoming more financially aware and identifying ways to lower costs will boost your bottom line and provide you with more cash to invest in core areas of your company. With this in mind, here are some effective ways to cut your business expenses:
Reduce staff turnover
Recruitment is a significant expense for businesses, and many companies invest heavily in their recruitment strategies to attract the best candidates. Recruitment costs increase significantly when you have a high staff turnover rate, as you will have to invest resources in advertising job openings, vetting applicants, and training new employees. High staff turnover will also cause disruption in your business, which is likely to harm productivity and overall revenue potential. The current job market favors candidates, and research shows that there are currently more job openings than hires. With this in mind, it is more important than ever for employers to keep their teams happy and take steps to retain their skilled employees. You can minimize staff turnover by offering competitive pay and benefits, praising your staff for their work, and offering regular career advancement opportunities.
Lower your office costs
Your office overheads are likely to be your biggest business expense. Reducing your office costs can be a reliable way to cut your business expenses and boost your bottom line. Luckily, there are several thrifty ways to lower office costs. Here are a few ideas:
Move your office to a more affordable area:commercial properties tend to be cheaper when they are located on the outskirts of city centers.
Relocate to a smaller office space that offers a lower monthly rent.
Reduce the number of employees in the workplace by offering flexible and remote working. This should cut your office overheads and can also be an effective strategy to boost office morale and employee engagement.
Encourage green habits in the office, i.e., switch lights off during the day and have all equipment on the more eco-friendly setting. Switching to more sustainable workplace practices will reduce your company’s carbon footprint and cut your monthly utility bills.
The majority of businesses make wholesale supply purchases. Negotiating lower deals on supplies can make a dramatic difference to your monthly expenses, especially if you make wholesale purchases on a frequent basis. Make sure you shop around to find the best-value wholesale distributors. If you want to target proven fast-moving products, consider selling wholesale cups & mugs. You should always speak with your current supplier before switching, as they may be prepared to match the lower rate. This will allow you to avoid any unnecessary hassle and reduce the risks involved with switching suppliers. You may also be able to instantly reduce your business expenses by finding better energy rates. Switching to a new business energy provider could save you up to 30% and takes just 5 minutes.
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Business Programs
Saving Cash in 2020: Your Quick Guide
/in Managing Your Finances/by StrategyDrivenYour Subscriptions
When you check through your bank statement each month, you may come to find a few recurring payments that you feel are above and beyond what you can cover at the moment. These might include exorbitant phone bills, fees for membership organizations, or subscriptions to software or services. Look up how to cancel Adobe subscriptions, and how to shut-down direct debits you’re paying in order to reduce your total expenditure every month.
Food and Drink
Next up is the cash you spend on food and drink for your family. While it’s always nice to splash out on a takeaway meal, or expensive food from restaurants and cafes, it can sometimes be a little irresponsible to do so when you’re not earning a great deal of cash. Cutting down on what you spend on food and drink – and this includes alcohol, which can be expensive – will help you save for the future in a responsible fashion.
Bills
Many families across the US pay their bills in relation to how much electricity and heating, or air conditioning, they use. In these summer months, there’s less reason than usual to use your energy up in your home: it’s warm outside without being stifling, and it’s light for most of the waking day. If you can cut down on your energy usage in your home, your bills will reduce dramatically as a result.
Vehicle
How much are you driving at the moment? Are you able to cut down the amount that you drive, replacing some journeys with public transport, walking, or cycling? The amount of cash you spend on gas and vehicle repairs each year can really add up, leaving you with costs of over $100 each month. If you can, attempt to leave behind some of your driving so that you’re saving this cash to put towards more valuable investments.
Luxuries
Finally, if you’re beginning to worry about your cash flow in the future, it’s best to begin thinking shrewdly about what you spend your cash on, and where you decide to spend your expendable income. Everyone is different, with unique luxuries and a unique spending pattern. It’s up to you to see what’s essential and what’s a luxury, and to cut out the latter in your monthly spending. You can return to that luxury spending when you’ve found financial stability once again.
Use the tips outlined in this short article to cut out a good deal of your monthly spending, helping you to achieve financial stability for yourself or for your family.
Forget Balance: How COVID-19 Drives Home the Importance of Work-Life Blending
/in Practices for Professionals/by Dan BruderCOVID-19 simply accelerated the trend that has been taking place for years. In my TEDx Talk, Blendification® of Work and Life, I highlight that social, technological, and economic impacts are forcing work and life together. The work/life balance myth has run its course. Here are some observations from the focus on work/life balance:
Work/life balance has become a cover for “look at how hard I am working.” Over the years, I have never heard anyone say, “I need more balance, I am spending way too much time with my family.” More accurately, it is the reverse. People are constantly saying they “need more balance,” which is code for “I am working too hard” or “look at how hard I am working.” They are typically bringing attention to their work ethic as if it is a badge of honor. As a result, work/life balance has turned into a personal proclamation about my strong work ethic at the expense of my personal and family life.
Work/life Balance creates an adversarial relationship between the two. When pursuing work/life balance, an adversarial or competitive relationship becomes prevalent. When this happens, people begin to keep score. It is not uncommon to hear people add up their work hours and become frustrated when they exceed what they consider “balanced.” The pursuit of balance is a futile quest. If you are pursuing your human potential, you cannot separate work and life. You will never achieve equilibrium between the two.
Work and home life do not happen in averages. Life happens in extremes, but we talk about it in averages. As someone once told me: “If I have one foot in a boiling hot bucket of water and the other in ice cold water, the average is fine, but I am not feeling fine!” That describes work and home life. There are constant demands that create the need to be in one area or the other. With fluctuating and conflicting demands, pursuing balance is unrealistic.
While work/life balance has proven to be a myth, blending work and life is more realistic and aligns with social, technological, and economic trends. There are two aspects to consider when blending work and life: the physical and the psychological. Here are some insights into each:
Physical Blending Work and Life
As the novel coronavirus swept the world, companies scrambled to create work-from-home capabilities. As mentioned, this accelerated the trends that were already taking place. Organizations quickly leveraged technology to enable a transition from working in an office to working from home. In some cases, this was done hastily because there were tangible deadlines and corresponding health consequences. As work becomes more integrated physically with homelife, here are ideas that will be helpful going forward:
Psychologically Blending Work and Life
While most of the focus has been on the physical aspects of blending work and life, the true benefits of a blended life are psychological. The millennial generation has opened our eyes to the need to pursue our human potential by positively impacting the world. Given that we spend over 50% of our waking time at work or in work-related activities, we cannot possibly realize our human potential without incorporating work. As a result, the workplace becomes one of the primary areas where people pursue their potential and maximize their impact on society.
What happens at work, happens at home, and this inherent connection is key to creating a better workplace, better homelife, better customers, and better communities. When workplace organizations recognize the importance of growing and developing their employees—not just their job-related skills, but their personal and leadership skills—they will see happier and more fulfilled employees taking pride in their entire life. Here are some points related to developing the psychological aspects of blending work and life:
The illusion of work/life balance has been revealed with the response to the COVID-19 outbreak. It is time to embrace the trends that have been taking place for years and leverage work to enhance employees’ lives, customers’ lives, and the benefits to their communities. Since COVID-19 accelerated working from home, business leaders now have the opportunity to increase their company’s impact by blending work life and homelife.
About the Author
Tips For Hiring In A Business
/in Talent Management/by StrategyDrivenKnow What You Want
It’s good to know what you want when it comes to hiring. If you haven’t got a job description outlined, then it can be a case of drawing in the wrong people, and then you end up starting all over again. It’s important to have your wants and needs in the job description and to have the role cemented before it gets distributed to relevant job boards and agencies. If you can be more precise and on the mark in the initial stages of hiring, then you reduce the risk of wasting everyone’s time and finding the right person. The last thing you want is to end up with someone who was never the right fit because you didn’t have all of the skills or duties of the employee outlined properly.
Assess The Skills & Experience Needed
Regardless of the company, the size or what industry it’s in, the skills and experience are an important part of the hiring process. You want to make sure that the person you’ve picked is capable of doing what you need them to do within the business. Whether you’re looking or plumbers who’ve taken plumbing programs for a handyman services platform or getting a new building manager, skills and experience are relevant. Just like the job description, it’s important to access what’s needed and to make sure that when you’re going through resumes, you’re getting rid of any that don’t match the criteria you’re after.
Look Out For Personality
Personality is just as important as the person fitting the job description. They need to be able to fit in with the company dynamic and they also need to feel like they are right for the company. If you’ve got someone that’s lacking in the company’s type of personality or doesn’t fit right, then it can cause problems with the rest of that staff and how overall atmosphere. So when it comes to hiring, be sure to get to know the person you’re interviewing, who they are, and what they enjoy outside of the workplace.
Introduce Existing Staff
Your current staff plays an important role of the hiring process because like mentioned above, the person you’re recruiting has to suit the team. With that being said, it’s worth introducing your team or an existing member of staff to the final few you’re interviewing. This can help to understand whether they’ll fit in properly and what the existing staff thinks of the individuals on a personal level. You don’t need to agree with their thoughts, but they are there to help come to the right decision overall.
Hiring in a business can be a challenge, and so it’s important to take it seriously and be detailed in your search.
A Helping Hand: 3 Key Things to Remember About the Government’s Coronavirus Aid Package
/in Managing Your Finances/by StrategyDrivenSmall Businesses Can Get Low-Interest Loans
The CARES act makes provisions for the Small Business Administration (SBA) to provide cash-flow assistance to businesses with fewer than 500 employees in the form of low-interest loans. These loans are provided by banks, but they’re guaranteed by the SBA. To get a loan, businesses must meet eligibility criteria, find an approved SBA 7(a) lender, and apply for the program before funding runs out. The best way to get started is to find information online at bswllc.com about CARES act loan consulting for small business owners.
The loans provided through the CARES act Paycheck Protection Program are specifically designed to help small businesses weather the storm of COVID-19. They can be used to cover things like payroll costs, paid sick leave, health insurance premiums, mortgage payments, and more. Eligible borrowers include not just small businesses, but also 501(c)(3) tax-exempt non-profits, registered veterans organizations, sole proprietors, tribal businesses, independent contractors, and the self-employed.
Coronavirus Relief Loans Are Partially Forgivable
When the loans are used to pay employee wages after businesses are partially or fully suspended or gross income declines by more than 50% in comparison to last year, the loans are partially forgivable. Eligible businesses with less than 100 full-time employees can get partial loan forgiveness regardless of whether they have been subject to shut-down orders.
If borrowers follow all the regulations laid out in the CARES act for how the loans can be used, they will be eligible for forgiveness of the money spent not just on payroll costs, but also rent, utilities, interest payments, and mortgages taken out before February 15, 2020. Since the SBA is guaranteeing the loans through private lenders, it is up to the discretion of the lender to determine forgiveness. The timeframe for forgiveness by lenders is currently 60 days from the borrower’s request.
Borrowers must provide documentation of how the money was spent to prove that the loan was used for approved purposes. This documentation must verify how many full-time equivalent employees are on the company’s payroll, how much they were paid, and how much the business spent on mortgage or lease obligations, utility payments, or other debt obligations. Lenders can request additional documentation if they deem it necessary to verify that the borrower’s expenses qualify for loan forgiveness.
Businesses that lay off employees or reduce their wages during the covered period of eight weeks from the time of taking out the loan will have the amount of forgiveness reduced. Employers who reduced payroll or employee headcounts between February 15 and April 26 can reinstate their former employee payrolls by June 30 to restore their ability to request loan forgiveness.
The CARES act also makes provisions for a refundable payroll tax credit. Employers who keep their workers on the payroll even if they can’t work full-time, or at all, can expect the program to cover 50% of their wages during the COVID-19 crisis. The credit will cover wages paid from March 13 to December 31 of this year up to $10,000 per eligible employee.
Student Loan Borrowers Get a Reprieve
Business owners aren’t the only ones who have benefited from the CARES act. In addition to the paycheck protection program, it also stipulates that student loan borrowers will not have to make payments on the federal loans until September 30. During this relief period, student loan payments will be fully deferred, and no interest will be accrued on the accounts.
There’s even more good news for borrowers whose loans are in rehabilitation. For every month that the loans are suspended due to the COVID-19 pandemic, the suspended payment will count as if the borrower had made the payment. This avoids disruptions to former students’ loan forgiveness obligations and reduces the burden on borrowers who are rehabilitating their federal student loans.
Borrowers with eligible student loans don’t have to do anything to take advantage of this program. They can simply stop paying their loans without incurring any fees or additional interest. Those who choose to continue paying their loans will also benefit since 100% of the payments will go to paying down their principal balances during this time.
Borrowers who have defaulted on their student loans will not have their wages garnished during the relief period. If they have experienced wage garnishments since March 13, borrowers can contact their employers to request that any funds sent to the Department of Education during this time be returned. Borrowers whose 2019 tax refunds or Social Security payments were withheld to pay off defaulted student loans can also have their refunds returned provided the process for withholding it was completed after March 13.
The CARES act also makes a provision for employers who pay down student loans as part of their employee benefits packages. These employers can now contribute up to $5,250 through the rest of 2020 tax-free, which benefits both employers and employees.
The Bottom Line
It can be difficult for business owners and consumers to sort out all the provisions of the CARES act by themselves. The best thing for those with questions about eligibility or the application process to do is to contact an accountant who can help them better understand what assistance is available during these trying times. The pandemic has changed everything about life in America and across the world, but it shouldn’t mean that business owners and families wind up suffering needlessly. Don’t be afraid to take advantage of the CARES act provisions for protecting America’s workers, but make sure to consult an expert before taking out an SBA-guaranteed loan to ensure eligibility and clarify requirements.
Effective Ways to Cut Your Business Expenses
/in Managing Your Finances/by StrategyDrivenReduce staff turnover
Recruitment is a significant expense for businesses, and many companies invest heavily in their recruitment strategies to attract the best candidates. Recruitment costs increase significantly when you have a high staff turnover rate, as you will have to invest resources in advertising job openings, vetting applicants, and training new employees. High staff turnover will also cause disruption in your business, which is likely to harm productivity and overall revenue potential. The current job market favors candidates, and research shows that there are currently more job openings than hires. With this in mind, it is more important than ever for employers to keep their teams happy and take steps to retain their skilled employees. You can minimize staff turnover by offering competitive pay and benefits, praising your staff for their work, and offering regular career advancement opportunities.
Lower your office costs
Your office overheads are likely to be your biggest business expense. Reducing your office costs can be a reliable way to cut your business expenses and boost your bottom line. Luckily, there are several thrifty ways to lower office costs. Here are a few ideas:
Negotiate cheaper supply costs
The majority of businesses make wholesale supply purchases. Negotiating lower deals on supplies can make a dramatic difference to your monthly expenses, especially if you make wholesale purchases on a frequent basis. Make sure you shop around to find the best-value wholesale distributors. If you want to target proven fast-moving products, consider selling wholesale cups & mugs. You should always speak with your current supplier before switching, as they may be prepared to match the lower rate. This will allow you to avoid any unnecessary hassle and reduce the risks involved with switching suppliers. You may also be able to instantly reduce your business expenses by finding better energy rates. Switching to a new business energy provider could save you up to 30% and takes just 5 minutes.